3 best investment schemes for senior citizens

Know all the details about the investment schemes for senior citizens that can help them grow their money and earn a regular income.
4 mins
15 Oct 2022

3 best investment schemes for senior citizens
Wealth is not built overnight and investing it in the wrong instrument at the wrong time can be detrimental to one's life savings and investment portfolio. Citizens over 60 usually have a sizeable chunk of savings accumulated over the years. Investing this hard-earned money in a sound financial tool is a wise decision. It can help senior citizens safeguard their golden years by creating a sizeable retirement fund. Various stable and secure investment tools with steady returns are available in the market.

Here is a lowdown on three safe investment options for senior citizens.

Fixed Deposit
A fixed deposit is an extremely low-risk, stable tool wherein investors can be certain that their money is safe and will grow steadily over time. The FD is one of the senior citizens' most preferred investment avenues. Various financiers provide FDs, but a fixed deposit from an NBFC like Bajaj Finance will safeguard your savings and get you significantly higher returns. Here is why:

1. High FD interest rates
Bajaj Finance online Fixed Deposit offers one of the highest FD rates in India. Senior citizens get an additional rate benefit of 0.25% p.a. over and above the base rates. Making it a great option to grow your savings. You can earn up to 7.95% p.a. on your deposit.

To understand how this works, consider investing Rs. 10,00,000 as an initial deposit amount for 44 months in a Bajaj Finance FD. Here is a tabular representation of returns at maturity for senior citizens.

Investor profile

Tenor

Interest rate

Maturity value

Senior citizen

44 months

7.95% p.a.

Rs. 13,14,811


As the table suggests, one can earn up to Rs. 13,14,811 in just 44 months.

2. Periodic payout option
By choosing the non-cumulative FD option with Bajaj Finance, investors can get periodic payouts instead of a lump sum at maturity. You can also choose the frequency of the payouts. You can get them monthly, or quarterly, half-yearly or even annually. These periodic payouts can help in funding your regular expenses post-retirement.
Apart from this, you also get another suite of benefits like the loan against the FD facility. When faced with an emergency, you might need liquid cash, Bajaj Finance allows you to access liquidity easily just when you need it.
Invest in a Fixed Deposit

Systematic Deposit Plan
The Systematic Deposit Plan (SDP) offered by Bajaj Finance is like a mix of a SIP and FD. You can make small monthly deposits instead of banking in a large corpus just like a SIP works. For each monthly deposit, you make books as a separate FD and the ongoing interest rate applies to each deposit you make. You can start investing with a deposit amount as low as Rs. 5,000 per month. The Systematic Deposit Plan (SDP) has two variants, the Single Maturity Scheme (SMS) and the Monthly Maturity Scheme (MMS). The difference between these two is the payout frequency. You can calculate your earnings even before investing using the Monthly Maturity Scheme Calculator and the Single Maturity Scheme Calculator.

Key features of SDP
1. Minimum deposit amount of Rs. 5,000 per month
2. Attractive interest rates go up to 7.95% p.a.
3. Decide to invest in flexible tenors between 12 to 60 months
4. Choose to make multiple deposits between 6 and 48
5. Latest interest rates applicable on each fresh deposit.
6. End-to-end online investment
You can invest in a Bajaj Finance online SDP without worrying about returns, defaults or untimely interest payouts as they have been accredited with the highest credit rating of CRISIL AAA/ STABLE and [ICRA]AAA(Stable).
Invest in an SDP

Mutual Funds
It is a mid-risk option that can give generous returns. A mutual fund is a collective investment where multiple investors invest in a company's stocks or bonds. It is done to earn the highest possible returns while mitigating risks. The risk factor depends on the type of stocks or bonds you invest in. The safest fun category among equity funds is Index funds, whereas gilt funds are the safest among the debt categories. A professional fund manager manages the fund.
The key features of Mutual Funds. 

  • A good option for investors with all risk appetites
  • High returns as it is a market-linked option
  • Convenient investment tool

Retirement planning is an extremely important and strategic task. It requires the investor to consider various factors like risks, returns, convenience, and more. Considering all this, it is safe to say that these three instruments are strong contenders as ideal investment options for senior citizens.